Employment Taxes – Express Payment Plan Requests

Posted on 06.12.14

Written by the Keiter Tax Department

If a small business with current employees has overdue federal employment taxes, but cannot pay the taxes immediately, it may apply to the IRS for an expedited installment payment agreement, while avoiding unnecessary penalties and interest via the In-Business Trust Fund Express Installment Agreement ("IBTF-Express IA"). This IRS program requires use of the Direct Debit payment option, but relaxes the documentation/review requirements applied to each taxpayer who submits a qualifying application and provides waiver guidelines for the Trust Fund Recover Penalty Determination assessments in these cases.

The IRS has set up the IBTF-Express IA for businesses with current employees that meet the following requirements:

1) $25,000 or less owed at establishment of agreement,

2) The debt is paid in full within 24-months or prior to the Collection Statute Expiration Date, whichever is earlier, and

3) The business must be compliant with all filing and payment requirements

Included in the $25,000 upper limit are taxes, assessed penalties and interest (not including accrued penalties and interest), and all other assessments on the tax modules. For those with balances above the $25,000 limit, lump sum payments to reduce the liabilities to the $25,000 maximum value prior to an agreement being granted are allowable.

For those who meet the above specifications, penalties assessed via the Trust Fund Recovery Penalty Determination will not be required on unpaid assessed balances of $25,000 or less.